It’s nerve-wracking when your credit card gets declined. Whether you’re shopping online or in person, knowing common reasons a card gets declined can help you avoid this unwelcome predicament or at least help you resolve it quickly.
10 common reasons why your credit card may be declined
1. You reached your credit limit.
Whether you’re a credit card newbie with a low credit limit or an established user with a high one, trying to charge an amount higher than your available credit can result in your card being declined.
While some credit card issuers allow you to go over your credit limit they might also charge you an overlimit fee. However, exceeding your credit limit is not recommended anyway as it can negatively impact your credit score. If you’re worried you could max out your credit card and get declined at the store, it can’t hurt to contact your issuer and request a higher limit.
Looking to expand your purchasing power? Here’s how to increase your credit limit.
2. Your card has expired.
If your card is past its expiration date, any attempt to use it will be denied. Credit card issuers typically mail a new card automatically before your card expires, so you should be able to avoid this scenario by paying attention to your expiration date and keeping an eye out for mail from your issuer. If you haven’t received your new card, make sure your address is up to date, give your issuer a call and properly destroy your old card.
3. Your card hasn’t been activated.
Upon receiving a new credit card, you should follow the instructions — often on a sticker on your card — to activate the card to make it usable. This can usually be done over the phone by calling the number on your card and following the automated instructions or by going online and entering the required information on the card issuer’s website. If you forget to activate your card and try to make a purchase, your card will get declined.
4. Your card was deactivated.
Do you have a credit card from an account where your spouse or someone else is the primary account holder? If you’re an authorized user on a credit card account, the primary cardholder can deactivate your card at any time, causing it to be declined.
Or, the primary cardholder could have made a big purchase without your knowledge, bringing the balance close to the credit limit and prompting your purchase to get declined. If you’re an authorized user, it’s wise to keep an open line of communication with the primary cardholder to avoid a surprise decline.
5. Your card has a hold on it.
A recent hotel stay, car rental or gas tank fill-up may have left a pre-authorized charge (or a hold) on your card, a move merchants make to ensure you have enough funds available on your card to pay the final bill. If your credit limit is on the lower end, or if your current balance is on the higher end, you may not have enough available credit due to the temporary hold, leading your transaction to be declined.
6. You’re late on payments.
One of the most important things you can do to be in good standing with your credit card and keep your credit score high is to make your payments on time. If you miss a payment, you should contact your credit card issuer and make a payment as soon as possible. Not only do late payments come with fees, repeated offenses can lead to your account being frozen or shut down.
How long do late payments affect your credit score? Here’s what you need to know.
7. There’s suspected fraud.
If your card issuer spots a charge on your card that raises red flags, they may message to ask if it was made by you. If you don’t respond, or you say no, they may promptly cancel your card. If you happen to miss the message from your card issuer while standing in the checkout line, for example, you might get an unpleasant surprise at the register: a card decline. If there was fraud on your account, you’ll need to wait to get a new card in the mail. If not, you can call your card issuer to correct the misunderstanding and get your card active again.
8. Your card is locked.
A handy feature on many credit cards is the ability to lock your card to prevent its use temporarily without canceling it. This can be especially useful if you’ve misplaced your card and want to look for it before assuming it’s lost. However, if you don’t remember to unlock your account, any attempts you make to use your card will be denied until the issue is fixed. This should be a simple fix using the issuer’s app or your online account.
9. You’re traveling.
Using your card while traveling internationally and sometimes even out of state may cause your issuer to flag your account for potential fraud and freeze your card. This can result in your card getting declined, but it can be resolved by contacting your credit card issuer to let them know you’re traveling and for how long. Better yet, you can easily avoid this problem by placing a travel alert on your card prior to any trips.
10. Your card isn’t accepted.
All credit cards are not created equal in terms of merchant acceptance. Cards from some networks, such as Amex and Discover, may be less widely accepted. This can be the reason your card gets declined, particularly when traveling outside of the U.S. Of the four major credit card networks, American Express, Discover, Visa and Mastercard, the latter two are the most widely accepted worldwide. It’s wise to carry at least one Visa or Mastercard any time you travel out of the country.
What’s the difference between Visa and Mastercard? We’ll break it down for you.
What should you do if your credit card is declined?
The possibility of a surprise card decline is one good reason to make sure you always carry a secondary credit card. Ideally, your backup card comes from a different card network, preferably one that’s widely accepted. For example, if your go-to card is an Amex, it’s a good idea to also carry a Visa or Mastercard.
If you find yourself in a situation where your credit card is declined, use your backup form of payment and then call your credit card’s customer service line. Finding out why your card was declined will determine what, if anything, you need to do to get your card back in working order.
How can you prevent your card from getting declined?
Ideally, you want to prevent your card from getting declined in the first place. It may not always be possible, but being proactive about what you can control may help.
- Make sure your card hasn’t expired and isn’t locked.
- Make your payments on time.
- Stay well under your credit limit.
- Sign up for text or email alerts so you’re notified of purchases flagged as suspicious activity.
- Set travel alerts prior to any trips.
- Make purchases periodically, as some issuers may cancel a card due to lack of use.
Frequently asked questions (FAQs)
Before you can fix it, you need to know the reason why your credit card was declined. Once you do, you can deduce whether calling your card issuer, making a payment, waiting or using a different form of payment is the right move. If you’re not sure of the reason for the decline, contact your credit card company.
Yes, insufficient funds can cause a credit card to be declined. This typically means that, considering your credit limit and your current balance, there is not enough room left on the card to cover the purchase amount.
Exceeding your credit limit is just one of the 10 common reasons your card may have been declined. Other common reasons for a credit card decline include: fraudulent activity, accidentally locking your card and forgetting to alert your credit card company before an international trip.
Credit: Source link